Specialty vehicles contractor Oshkosh (NYSE:OSK) missed Wall Street’s revenue expectations in Q1 CY2025, with sales falling 9.1% year on year to $2.31 billion. Its non-GAAP profit of $1.92 per share was 5.9% below analysts’ consensus estimates.

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Oshkosh (OSK) Q1 CY2025 Highlights:

Revenue: $2.31 billion vs analyst estimates of $2.42 billion (9.1% year-on-year decline, 4.5% miss) Adjusted EPS: $1.92 vs analyst expectations of $2.04 (5.9% miss) Adjusted EBITDA: $245.4 million vs analyst estimates of $249.9 million (10.6% margin, 1.8% miss) Operating Margin: 7.6%, down from 10.2% in the same quarter last year Free Cash Flow was -$435.2 million compared to -$455.9 million in the same quarter last year Backlog: $14.55 billion at quarter end, down 11% year on year Market Capitalization: $6.45 billion

StockStory’s Take

Oshkosh’s first quarter results were influenced by softness in the Access segment and ongoing strength in Vocational, while management highlighted that emerging tariff impacts have become a primary focus. CEO John Pfeifer pointed to resilient operational execution within Vocational and early ramp-up progress for the Next Generation Delivery Vehicle (NGDV) in Defense, while acknowledging Access faced volume headwinds. The company attributed the quarter’s margin pressure to higher operating expenses and increased new product development spending, partially offset by improved pricing in Vocational.

Looking ahead, management is prioritizing mitigation of newly announced tariffs, which they estimate could have up to a $1 per share impact for the year, mostly in the back half. Pfeifer emphasized, “We are proactively working to mitigate potential impacts from tariffs,” and CFO Matt Field clarified that most of the burden will fall on the Access segment, with cost actions and supply chain adjustments planned to offset about half of the hit. Management maintained confidence in achieving full-year profit targets, excluding tariff impacts, and expects a stronger second half as Defense ramps NGDV production and Vocational investments continue to pay off.

Key Insights from Management’s Remarks

Oshkosh’s leadership focused on the interplay between segment-specific performance and external pressures, especially tariffs. Management described how operational changes, supply chain shifts, and product introductions contributed to the quarter’s results.

Vocational Segment Momentum: The Vocational segment achieved notable year-over-year growth, driven by higher refuse and recycling vehicle sales, robust pricing, and improved manufacturing productivity. Management cited recent investments in production and a new dealer network as key contributors. Access Segment Resilience Amid Headwinds: Despite lower sales in Access, management reported resilient margins due to cost controls and pricing power. The segment continues to benefit from mega projects and infrastructure spending, with a stable backlog and no significant order cancellations observed. Tariffs and Supply Chain Mitigation: Newly announced tariffs are expected to impact primarily the Access segment. Management is implementing targeted mitigation through supply chain adjustments and negotiations, referencing prior success in localizing production in response to European tariffs. Defense Segment Ramp-Up: The Defense segment is progressing toward full-rate NGDV production for the United States Postal Service, with sequential margin improvement expected across the year. Orders from the U.S. Army and international customers, such as the Netherlands, support the longer-term outlook. Product and Technology Innovation: Oshkosh continues to introduce new products, including electric vehicles and integrated telematics solutions, and highlighted customer demand for advanced technologies in both fire and airport equipment. These initiatives are positioned as key differentiators supporting future growth.

Story Continues

Drivers of Future Performance

Management’s outlook for the rest of the year centers on tariff mitigation, continued operational efficiency, and execution of key programs, particularly in Defense and Vocational segments.

Tariff Impact and Mitigation: The company anticipates that tariffs will create a headwind—especially in Access—but is taking steps to offset about half of the projected impact through cost reductions and supply chain changes. Management acknowledged that most effects will be felt in the second half. NGDV Production Ramp: Oshkosh expects Defense revenue and margins to improve as NGDV production reaches full rate by year-end, which management believes will drive stronger second-half results. Vocational Investments and Backlog: Continued investment in Vocational manufacturing and expansion of the dealer network are expected to support ongoing revenue and margin growth. Management sees a robust backlog and healthy demand, especially in refuse and recycling.

Top Analyst Questions

Stephen Volkmann (Jefferies): Asked if Oshkosh could fully offset tariff costs with price increases given softer demand; CEO John Pfeifer replied the company aims to minimize customer impact, using pricing as a last resort. Mig Dobre (Baird): Sought specifics on tariff cost exposures by segment; CFO Matt Field confirmed Access is most impacted, with mitigation efforts focused on sourcing and negotiation. Jamie Cook (Truist): Asked about the allocation of tariff costs and margin implications for Access; Field reiterated the majority of direct impact falls on Access, but cost offsets are company-wide. Kyle Menges (Citi): Questioned the drivers behind lower telehandler sales and the potential impact of lost contracts; Pfeifer noted some CAT contract effects but emphasized growing market share and confidence in long-term outlook. Chad Dillard (Bernstein): Probed the timeline and mix of cost versus price actions to mitigate tariffs; management explained that most mitigation will occur in the second half through both cost controls and selective pricing.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will monitor (1) Oshkosh’s effectiveness in offsetting tariff headwinds through supply chain and cost actions, (2) the pace and profitability of NGDV production ramp in the Defense segment, and (3) the durability of Vocational backlog and margin expansion as investments come online. Execution of new product introductions and the ability to maintain customer demand in Access amid external pressures will also be important indicators.

Oshkosh currently trades at a forward P/E ratio of 9.3×. At this valuation, is it a buy or sell post earnings? Find out in our free research report.

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